"I will not form a bloc that has Hanin Zoabi in it," says head of Israel's second-largest party, following speculation that he would challenge the incumbent prime minister • "The people want me to continue leading this country," says Netanyahu.

Mati Tuchfeld and Shlomo Cesana

Yesh Atid Chairman Yaid Lapid speaking to reporters outside his house in Tel Aviv on Wednesday.

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Photo credit: Yehoshua Yosef

One day after the election results were announced and Yair Lapid became the head of the second-largest party in Israel, it became apparent that Benjamin Netanyahu would continue to serve as prime minister when Lapid ruled out trying to forge a barrier bloc to rival him.

With most of the votes tallied, it appeared at first that the electorate was divided equally between the Right and the Left (ultimately the balance came down to a 2-seat majority for the Right), with Likud-Beytenu, Habayit Hayehudi, Shas and United Torah Judaism on the Right and Lapid's Yesh Atid, Labor, Hatnuah, Meretz, Kadima and the Arab parties on the Left. As the head of the largest party on the Left, Lapid would be the natural candidate to lead a move to unite the leftist parties and create a bloc that would counter Netanyahu's, but he refused to join forces with Israeli Arab MK Hanin Zoabi.

Speaking outside this home in Tel Aviv on Wednesday, Lapid said, "I want to remove that option from the table. I will not form a bloc that has Hanin Zoabi in it. The results of the election are clear. I heard the press conference given by the prime minister. I was pleased that he mentioned all the issues that we talked about over the last year and all the issues that matter to the people who live in this place and love it."

Even before Lapid signaled to Netanyahu that he would not challenge him, the prime minister had already welcomed Lapid into his next coalition. Speaking to the press earlier Wednesday, Netanyahu said, "The people have had their say. We are waking up to a post-election morning with a clear message from the Israeli public — they want me to continue leading this country and they want me to assemble a coalition that will make major internal changes in three areas: equality of the burden, affordable housing and reform in the system of government."

According to sources close to the prime minister, Netanyahu plans to make Lapid his chief coalition partner and will try to negotiate a deal with him before negotiating with any of the other parties. However, sources say that Netanyahu will also seek to include the ultra-Orthodox parties in the coalition as well as Habayit Hayehudi and Kadima.

According to the sources, Lapid will get preference, but Netanyahu does not want the entire coalition to hinge on one man. Likud is anxiously awaiting the final results in the hope that the Right will ultimately gain another seat (most likely for Habayit Hayehudi), changing the balance between the opposing blocs to 61:59 in favor of the Right. This will ensure that Lapid will not be able to topple the government should he decide to pull out of the coalition in the future.

Despite reports that Lapid wants a coalition free of ultra-Orthodox parties, senior Likud officials said Wednesday that Netanyahu wants to include them in his coalition, and that the prime minister believes a compromise can be reached on the main sticking point — military service for all and equality in sharing the burden. At this point Netanyahu is not ruling out inviting Hatnuah, headed by Tzipi Livni, into the coalition, saying, "I haven't ruled out anyone who hasn't ruled me out."

Livni said Wednesday that "we still don't know what kind of coalition will take shape. One thing is clear, though: We entered the election process with a clear agenda and wherever we end up, we will cultivate this agenda."

The general assumption is that Netanyahu will try to assemble as wide a coalition as possible, with 80 MKs including Yesh Atid, Habayit Hayehudi, Shas and United Torah Judaism, on the understanding that the religious parties can object to proposals on ultra-Orthodox military service. Lapid's associates clarified on Wednesday that "the first thing that we will place on the table is a bill requiring everyone to serve in the military. We will not give an inch on this."

On Thursday, Lapid appointed the team that will enter coalition negotiations on behalf of the party. The team includes Uri Shani, who was a close adviser to former Prime Minister Ariel Sharon, Danny Vesely, who produced Lapid's talk show for 15 years, and the manager of the Yesh Atid campaign Hillel Kobrinsky.

The team will be accompanied by the party's legal advisers, attorneys Ronen Aviani and Guy Busey.

Meanwhile, former Foreign Minister Avigdor Lieberman — No. 2 on the Likud-Beytenu list — spoke at an Yisrael Beytenu faction meeting in Jerusalem on Wednesday, saying, "A partner with 19 Knesset seats is a senior partner, not a minor one."

Asked which ministerial portfolio Lapid was likely to get, Lieberman said, "I think that Lapid, who resonated with the middle class, would prefer the Finance Ministry over the Foreign Ministry."

"Clearly the people want a dramatic change in internal policy," Lieberman said.